How to read SEC Form 4 (Insider Trading Report)

Disclaimer: The analysis and opinions expressed in this article reflect solely the author’s subjective commentary and do not constitute any investment advice; nor do they entail legal liability for any investment decisions. Previously, we discussed insider trading and shared several websites where such transactions can be viewed. If you missed that article, please click below: How to Track Insider Trading for U.S.-Listed and Chinese-Concept Stocks (Futu and Xueqiu Are Not Accurate) We received private messages asking about the original SEC Form 4 filings submitted by insiders—specifically, why certain trades appear on one website but not another, and which source should be trusted as authoritative. Today’s article addresses exactly that. Let’s use NVIDIA (NVDA) as an example. First, visit InsiderCow—the second website we previously recommended—and search for NVIDIA’s most recent insider trading records: You’ll see a list of insider sell transactions only. Next, go to J3sg—the third website we recommended—and search again for NVIDIA’s latest insider trades: In the “Action” column, you’ll notice not only the previously identified transaction types—AS (Automatic Sale) and S (Sale)—but also many additional entries absent from the first site. What do these mean? Scroll further down the page to find J3sg’s explanation of “Action Codes”: Among them, B and S are straightforward: Buy and Sell. But what distinguishes AB (Automatic Buy) and AS (Automatic Sale) from ordinary B and S? And what does D (“Disposed”)—which appears frequently on the second site but not the first—mean? Moreover, what are GD and GA, which don’t even appear in the Action Code legend? To answer all these questions, we must turn to the original source document filed by insiders: SEC Form 4. Take Jensen Huang, NVIDIA’s CEO—renowned for his sharp strategic execution—as an example. Click the “Form” button next to any of his transaction records (or go directly to the SEC’s EDGAR database and search for NVDA to view filed Form 4s). Let’s first examine a typical Form 4: The green-highlighted sections contain basic personal information—name, title, etc.—and are self-explanatory. Our focus lies in Table I (Figure 1) and Table II (Figure 2): the former records non-derivative securities (e.g., common stock), while the latter covers derivative securities (e.g., options). We’ll walk through the numbered items in the figure: 1: Security type—for instance, “common stock” (most common), “preferred stock,” etc. In practice, you’ll mostly encounter common stock. 2: Transaction date 3: Transaction code—this is the most critical field. Beyond P (Purchase) and S (Sale) (note: the form requires “Purchase,” not “Buy”), numerous other codes exist. For example, code F in the figure stands for “Delivery or withholding of shares to pay taxes due upon receipt, exercise, or vesting of securities.” Is that confusing? Put simply: Jensen Huang previously received shares—whether via equity incentives or other means—and under U.S. law, such grants trigger tax obligations. He elected to sell a portion of those newly granted shares to cover the associated tax liability. That’s a much more intuitive way to understand it.

Has anyone used SEC forms for trading U.S. stocks?

Peter Lynch once said: “Insiders may sell shares for many reasons—but they buy for only one: they believe the stock price will rise.” Form 4 reports are the sole official channel for tracking real-money trades by U.S. executives and directors—and they’re filed within just two business days (far faster than the 45-day lag for 13F filings). Yet raw Form 4 data is noisy. This article provides a deep, technical breakdown of Form 4 transaction codes—and shows how to use US Stock Alpha (Mei Gang Zhi Xun) to filter out noise like equity grants, thereby precisely capturing executives’ genuine “bullish signals” across the entire market. In U.S. stock investing, wouldn’t your odds improve significantly if you could learn—before the public—that a company’s CEO or CFO is aggressively buying their own company’s shares? Those who know a company’s true operational health best are always its management team. Recognizing this, the SEC established strict insider trading disclosure rules. Today, we’ll fully demystify this tool—often dubbed “Wall Street’s lie detector”: Form 4. I. What Is Form 4—and Why Is It Superior to 13F? Form 4 (Statement of Changes in Beneficial Ownership) is the SEC-mandated disclosure form that corporate insiders—including officers, directors, and shareholders holding ≥10% of the company’s stock—must file whenever they buy or sell their company’s shares. Its biggest advantage? Exceptional timeliness. By law, insiders must file Form 4 within two business days of executing a trade. Thus, what you see reflects near–real-time management action—not the six-week delay inherent in 13F filings. II. Critical Pitfalls to Avoid: A Full Breakdown of Raw Form 4 Reports and Transaction Codes Many retail investors visit the SEC’s official EDGAR database to look up Form 4s—only to feel overwhelmed by dense, technical tables. The gravest mistake? Mistaking an executive’s receipt of “free options” (e.g., as part of compensation) for an actual out-of-pocket purchase—leading to flawed investment decisions. Here’s a screenshot of an actual Form 4 retrieved from the SEC’s official site: To decode this “raw” report, focus exclusively on Column 3: “Transaction Code.” This is the heart of Form 4. For your convenience, we’ve compiled a full Form 4 guide—including key code definitions—at the end of this article. Key reminder: When reviewing Form 4s on the SEC website, look only for transactions coded “P” (Purchase). Ignore visually distracting codes like A, M, and F. Their precise meanings are detailed in the Appendix at the end of this article. III. Moving Beyond Inefficient Manual Analysis: How to Cut Through the Noise with Tools Manually sifting through Form 4s on the SEC’s website isn’t just tedious—you must translate arcane codes yourself and cannot easily track an executive’s long-term behavior across time. Worse still, with thousands of U.S. listed companies, how would you possibly know which CEO is quietly buying shares today? That’s precisely why advanced investors rely on structured-data platforms like US Stock Alpha (Mei Gang Zhi Xun).

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